Farida Alawi, ‘Grameen Bank’ from Banten

Dwi Bayu Radius

· 6 minutes read

Farida Alawi, 58, disburses loans without collateral for the poor through cooperatives. Their welfare is improved without losing their compliance in paying installments. Although having been repeatedly scorned, Farida keeps working to alleviate the poor from poverty.

Farida met with a number of residents in Sindangsari village, Pabuaran district, Serang regency, Banten, Friday (5/4/2019). The chairwoman of Abdi Kerta Raharja (AKR) Cooperatives politely entered the front yard of Endah Purwani Basuki, 52, an AKR debtor. In the yard were mustard and fresh leafy lettuce ready to be harvested. Catfish ponds are also seen behind the vegetables that are cultivated in a hydroponic system.

“I bought the vegetables from Mrs. Endah. The catfish will be available for sale within 1.5 months,” Farida said while watching the fish in a pond. Endah regularly makes installments. She has received loans three times, from Rp 1 million to Rp 2.5 million, with a repayment period of six months. These loans are used to finance Endah’s school children.

“Well, I am only a teacher at PAUD [pre-kindergarten education]. I receive payment once every six months or maybe even a year,” she said. Endah is only paid Rp 100,000 per month. As a chairperson of the Flamboyan Posyandu in Sindangsari village, she also receives a stipend of Rp 75,000 per month, which she receives every three months. Meanwhile, her husband is a mechanic, earning around Rp 2 million per month.

Nevertheless, Endah is able to pay her credit bill regularly so that AKR facilitated her to become a participant in the social program.

The cooperation between Bank Indonesia and AKR was realized to increase Endah’s income by providing free vegetable and catfish farming.

Endah is amongAKR beneficiaries. For 10 years, the cooperative had 36,350 members with assets reaching Rp 82 billion. Even without collateral, the nonperforming loan (NPL) rate is very low or never exceeds 0.45 percent.

The cooperative provides loans ranging from Rp 800,000 to Rp 25 million with varied interest rates. Loans of less than Rp 5 million are usually taken by small and medium businesses, for example, subject to an interest rate of 2 percent per month.

Although loans are channeled to the poor, they are disciplined to pay installments. In fact, some of them repay loans faster.

Inspired by Grameen Bank

The cooperative occupies a three-story building in Kaduagung subdistrict, Tigaraksa district, Tangerang regency, Banten. The building, with a total area of 450 square meters is equipped with showrooms for the products produced by AKR members, training halls and counters.

Farida’s conviction that the small community is able to pay off the loan was inspired by Grameen Bank ,which was founded by Muhammad Yunus in 1983. The citizen of Bangladesh was awarded the Nobel Peace Prize in 2006 for Grameen Bank’s success in channeling loans to the poor.

“I did idolize Yunus. When I went to Bangladesh in 2008, I became increasingly convinced of the greatness of Grameen Bank. I see the Bangladesh situation myself,” he said. In Bangladesh with higher poverty, the bank trusted beggars as debtors and they were able to pay it off.

The origin of AKR began when Farida witnessed riots and the monetary crisis in 1998. Many people fell into poverty. At that time, Farida served as head of regional investment at the Coordinating Tangerang Investment Office.

In 2003, Farida was challenged by the Tangerang regent at that time, Ismail Iskandar, to make a program to alleviate society from poverty. “I propose the establishment of micro-financial institutions in the villages. It has not started and I was laughed at,” she said.

The poor can receive loans without collateral. Meanwhile, many village unit cooperatives (KUD) actually went bankrupt. “Until there was a district head saying, ‘Cut my ears if it works. It’s clear, many KUDs didn’t work. Only the loan sharks survived. Yet, similar programs in Bangladesh were a success,” he said.

Farida was determined to run the program. Farida’s persistence allowed for the Rp 250 million program for poor families to be realized. People in other villages then applied for similar loans.

“More funds were disbursed. The program continued to grow until it was implemented in 17 subdistricts with zero percent credit problems,” she said. In 2004, funds could be transferred to other borrowers. The money that Farida manages reached billions of rupiah in 2005.

Therefore, Farida along with the Tangerang Legislative Council (DPRD) drafted the Tangerang Regency Regional Regulation No. 5/2006 concerning the District Credit Agency (LPK) and Development Financing Institutions (LPP) for Micro, Small and Medium Enterprises (MSMEs).

While working to develop the LPK and LPP UMKM, Farida founded AKR in 2009. She then expressed her intention to make LPK and LPP UMKM a cooperative. “Again, there were some criticisms. ‘Cooperatives are doomed to fail. There’re KUD that went bankrupt’. I want to make it clear, the cooperative can progress,” she said.

When the Benteng Mikro Indonesia (BMI) Cooperative was finally established in 2013, the deposits it managed reached Rp 12 billion with assets of Rp 300 billion and employees of 300 people. In 2015, Farida voluntarily resigned as BMI supervisor.

“In accordance with Law No. 17/2012 concerning Cooperations, double jobs in similar cooperatives are not permitted,” she said. In addition, Farida wanted to focus on raising AKR because the cooperative was not fostered by the regional administration.

Not only profit oriented, AKR also applies social care. Since the cooperative was established, for example, 1,000 students have attended the Package C education equivalent to senior high school (SMA) free of charge.

Farida aspires to establish a free vocational high school (SMK). She also plans to build an SMK focusing on information technology.

Farida also convinced the AKR members to help people in need through zakat, infaq, alms and endowments. “I am sure we can purchase a plot of land for the vocational school with a bank loan and we repay it with people’s alms,” she said.

Some of AKR’s profits are also set aside to help the needy, such as by organizing mass circumcisions, home repairs and orphan assistance. “Thirteen houses have been repaired,” said the head of the Development Economy Section at the Tangerang Regency Administration, who retired on Jan. 1, 2019.

Farida Alawi

Born: Purwakarta, West Java, Dec. 22, 1960

Husband: Denny, 64,

Children:

- Senny Hafiani Nurdina (29)

- Firiyal Fakhril Hadi (28)

Education:

- SDN 5 Purwakarta, West Java, 1967-1973

- SMP Cintawana, Tasikmalaya, West Java, 1973-1976

- SMA Cintawana, Tasikmalaya, West Java, 1976-1979

- Bachelor in Management from Islam Nusantara University in Bandung, West Java, 1980-1985

- Master’s degree in Governance Studies from Satyagama University, Jakarta, 2000-2002

Editor:

kompascetak